Landlord regulations in the residential property sector are
becoming ever more complex with a confusing range of laws for the adherence of both
the landlord and managing agent; and with their failure leading to Landlord’s
potentially being fined up to £30,000 or even face a jail sentence.
For overseas Landlords, the regulations become more complicated with money laundering and UK taxation.
2019 will see a host of new landlord and buy to let regulations,
here’s what to look out for:
Tenant Fee Ban
The introduction of new legislation which will ban
landlords and Estate Agents from charging the tenant a fee for the creation of
a new tenancy which includes setting up the application, preparing the tenants
agreement, inventory check etc. Expected to be introduced mid this year
Cap on Deposits
Currently, there are proposals to cap deposits at five weeks’ rent for properties where the annual rent is less than £50,000. That cap increases to six weeks’ rent where the annual rent is £50,000 or more.
Mortgage Interest Relief
Those submitting their tax return this January, covering the period of 2017-2018; will feel the effect on the government’s phasing out on mortgage interest relief. Phasing out completely by 2020, new proposals will mean landlords will no longer be able to deduct mortgage interest costs from taxable profits if the property is owned by an individual. It does not affect properties owned by companies. Instead, landlords will only be able to claim basic rate finance costs at 20%. The new plans will mainly affect those who are in the higher income bracket while those within basic rate will generally remain unaffected
Scotland has already seen the introduction of long term tenancies for tenants; and now the UK is looking to introduce a similar model. If plans are approved, landlords would have to give a minimum of three-year term tenancies with a 6 month break clause
Be Eco or You Can't Let
Introduced last April, properties must have an Energy Performance Certificate (EPC) rating of an “E” or above before any new tenancy is created and will affect existing tenancies from April 2020. This means that it will be illegal to rent your property if it has an EPC rating of an F or G, with possible fines or even legal action being taken by the authorities for any breach in these rules.
Whether we agree or disagree with these new and existing regulations, if you want to operate in the UK rental market then these regulations should part of your procedures, policies and management process.
Below are just some of the Laws and Regulations that Landlords and Agents are required to understand and implement:
- Landlord and Tenant Act 1985
- Health and Safety Act
- Taxation and National Insurance Regulation
- Gas Safety Regulation
- Energy Act 2011
- Energy Efficiency Act 2015
- Finance Act 2015
- Housing and Planning Reform Act
- Estate Agents Act 1980 Homes Act 2018
- Tenant Fees Act 2018
- Tenant Deposit Regulation
- Right to Rent Regulation
- Leasehold Reform Act 1993
- Money Laundering Regulations
- HMO Regulation
- Local Authority Housing Regulations
- Immigration Act